San Diego New Laws

June 30, 2016

San Diego’s voters overwhelmingly voted in favor of a ballot measure to pass Proposition I, which increases the minimum wage for workers in the City of San Diego and mandates that these employees be provided with paid sick leave benefits that exceed the benefits already mandated by California state law.  The San Diego City council had previously approved this minimum wage and paid sick leave ordinance in 2014, but a voter referendum caused it to be placed on the 2016 ballot for voter approval.

The new law applies to employers regardless of size.  Covered employees are those who, in one or more calendar weeks of the year, perform at least two hours of work within the geographic boundaries of the City of San Diego.  Effective essentially immediately (technically, when the results of the election are certified — on or before July 7, 2016), employers must pay covered employees at least $10.50 per hour for each hour worked in the City.  Effective January 1, 2017, the local minimum wage will rise to $11.50 per hour.  Beginning January 1, 2019, the minimum wage will be adjusted in accordance with the CPI.  In October of each year, the City will publish a bulletin announcing the adjusted minimum wage for the next year.

In addition to raising the local minimum wage, the new law imposes more burdensome paid sick leave requirements on San Diego employers. Covered employees must accrue one hour of paid sick leave for every 30 hours worked within the City.  Newly hired employees begin accruing paid sick leave immediately but may prohibited from using the leave until their 90th day of employment.  Exempt employees are presumed to work a 40-hour workweek, unless their regular work schedule is less than 40 hours, in which case their accrual is based on their regular workweek.

Importantly, the new law does not permit caps on accrual of paid sick leave, however an employer may limit an employee’s use of such leave to 40 hours in a 12-month period (i.e. calendar year, anniversary year, or other 12-month period defined by the employer).  Even though the employee’s use of leave may be limited to 40 hours in a year, the employee continues accruing paid sick leave at the rate of one hour for every 30 hours worked and all accrued, unused leave carries over from year to year.  An employer is not required to pay out unused leave on termination of employment.  However, if an employee is rehired within 6 months, any and all previously accrued, unused leave must be reinstated (unless it was paid out on termination of employment).

Sick leave can be used for an employee’s own illness, medical treatment, or preventive care, or to attend to a family member’s illness, medical care, or treatment.  It can also be used for purposes of seeking treatment, attending legal proceedings, or similar activities stemming from the employee or employee’s family member being a victim of domestic violence, sexual assault, or stalking.  Finally, sick leave can be used if the employer’s office is closed due to a public health emergency or the employee’s child’s school or daycare is closed due to a public health emergency.  Sick leave must be paid at the same hourly rate or other method of compensation the employee earns from his or her employment.

An employer may set a minimum increment for use of paid sick leave, but the minimum increment cannot exceed 2 hours.  Where the need for leave is forseeable, the employer can require reasonable advance notice, not to exceed 7 days’ advance notice.  Where the need for leave is not forseeable, the employer can require notice as soon as reasonably practicable.  For an absence of 3 or more consecutive days, an employer can require reasonable documentation (e.g. a doctor’s note) confirming that the leave was taken for a covered purpose.  An employer may not require an employee to find a replacement worker as a condition of using sick leave.

An employee may not be retaliated against for using rights afforded and protected by the new law.

An employer who has a paid time off or personal time off policy that provides at least the minimum amount of paid leave time as required by this law, and who allows such leave to be used for the same purposes and under the same conditions as the paid sick leave law, does not need to provide a covered employee with additional sick leave time under the new law.  Given that most paid time off policies have caps on accruals of paid time off, it is questionable whether such policies will suffice to exempt employers from complying with the San Diego law (because the new law does not authorize accrual caps). It is also questionable whether a policy that simply frontloads 5 or more days of paid time off each year will comply (even though it seems that it should because it satisfies the purpose of the new law).  This is because the San Diego law is silent on the issue of frontloading paid sick leave time and does not allow caps on accrual (even though an employer can limit use to 40 hours in a year).

The new law of course has notice and posting requirements as well.  The City will publish a notice for employees that must be posted in any workplace where covered employees work.  Employers must also provide each current employee and covered new hires with written notice of the employer’s name, address, phone number, and the requirements of the new law.  The City will publish a template for this notice.  Employers may provide this notice by way of electronic communication in lieu of paper notice.

Employers must keep records of wages paid and accruals and use of sick leave for 3 years.  The new law of course has enforcement mechanisms and penalties for non-compliance built in.  Employers with employees working in San Diego should review their minimum wage and paid sick leave policies and revise them as necessary to ensure compliance with the new local law.

 

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New Laws for Los Angeles

June 29, 2016

The Los Angeles City Council has passed a paid sick leave ordinance, which is slated to go into effect July 1, 2016 in conjunction with the previously passed minimum wage ordinance.  The sick leave ordinance will require employers in the City of Los Angeles to provide paid sick leave benefits that exceed the benefits already mandated by California state law.

Under the previously passed Los Angeles Minimum Wage Ordinance minimum wage rate hikes are set to increase at different intervals depending on the numbers of covered employees.  Covered employees are those who perform at least two hours of work within the geographic boundaries of the City of Los Angeles within a particular week.  For employers with 26 of more employees, the minimum wage rate will increase to $10.50 per hour beginning July 1, 2016.  For employers with 25 or fewer employees, the minimum wage rate will not increase to $10.50 until July 1, 2017.  Thereafter, the ordinance sets forth the following schedules for minimum wage increases:

For employers with 26 or more employees:

  • July 1, 2017: $12.00 per hour
  • July 1, 2018: $13.25 per hour
  • July 1, 2019: $14.25 per hour
  • July 1, 2020: $15.00 per hour

For employers with 25 or fewer employees:

  • July 1, 2018: $12.00 per hour
  • July 1, 2019: $13.25 per hour
  • July 1, 2020: $14.25 per hour
  • July 1, 2021: $15.00 per hour

Starting July 1, 2022, the minimum wage rate will increase every July 1st as determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in the Los Angeles metropolitan area.  These adjusted minimum wage rates will be released on the preceding February 1st.

In addition to raising the local minimum wage, the paid sick leave ordinance imposes more burdensome paid sick leave requirements on Los Angeles employers.  The new paid sick time statute, as an amendment to the minimum wage ordinance, covers all employees who perform at least two hours of work within the geographic boundaries of the City of Los Angeles within a particular week.  However, covered employees must be employed by the same employer for at least 30 days in order to be entitled to such benefits.

The new paid sick leave ordinance requires that employees be allowed to use 48 hours of paid sick leave per year and covered employees can begin using paid sick leave on July 1, 2016 or on the 90th day of employment.

There are two methods in which employers may account for the accrual of the requisite 48 hours.  First, an employee can be provided with the full 48 hours of paid sick leave at the beginning of year, which could be on a calendar year, the employee’s anniversary, or other 12-month period.  Alternatively as a second method, an employee could accrue one hour of paid sick leave for every 30 hours worked.  However, these accruals are not without limit and an employer may establish a cap of maximum accrual hours at 72.  Furthermore, no additional time off is required if the employer has a paid time off policy which permits up to 48 hours of leave annually for the purposes caring for him or herself as the employee, an employee’s family member or anyone of “close association similar to that of a family member.”  Upon termination, employers are not required to pay the employee for paid sick leave hours that have been accrued, but unused.  However, if a terminated employee is re-hired within one year, that employee is entitled to receive the accrued, but unused paid sick leave time.

While the requirements for utilizing such leave are to be for same purposes as that under the existing California Paid Sick Leave laws, the City of Los Angeles ordinance has expanded the definition of a family member to include, “any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”  Additionally, this ordinance does not specify that employers may require two-hour increments for utilizing paid sick leave.  While employers may require reasonable documentation from an employee utilizing paid sick leave, employers should remain cognizant and compliant with state laws when requiring such documentation.

Thursday, I will post for San Diego’s new law.


Major Change to the Joint-Employer Rule!

June 27, 2016

Well folks, another bad decision that does not help employers. In a landmark 3-2 decision—Browning-Ferris Industries of California —the National Labor Relations Board (NLRB) has re-written its joint-employer standard. This is an issue that will impact employers on a National basis.

The common-law definition of an employment relationship establishes the outer limits of a permissible joint-employer standard under the Act. But the Board’s current joint-employer standard is significantly narrower than the common law would permit. The result is that employees covered by the Act may be deprived of their statutory right to bargain effectively over wages, hours, and working conditions, solely because they work pursuant to an arrangement involving two or more employing firms, rather than one. Such an outcome seems clearly at odds with the policies of the Act. …

The Board may find that two or more entities are joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment. In evaluating the allocation and exercise of control in the workplace, we will consider the various ways in which joint employers may “share” control over terms and conditions of employment or “codetermine” them. …

We will no longer require that a joint employer not only possess the authority to control employees’ terms and conditions of employment, but also exercise that authority. Reserved authority to control terms and conditions of employment, even if not exercised, is clearly relevant to the joint-employment inquiry. … Nor will we require that, to be relevant to the joint-employer inquiry, a statutory employer’s control must be exercised directly and immediately. If otherwise sufficient, control exercised indirectly—such as through an intermediary—may establish joint-employer status.

The Board justifies this expansion of the joint-employer standard by stating that it is good for business and for the hiring of employees:

As the Board’s view of what constitutes joint employment under the Act has narrowed, the diversity of workplace arrangements in today’s economy has significantly expanded. The procurement of employees through staffing and subcontracting arrangements, or contingent employment, has increased steadily…

The NLRB, is not being honest with us. There is nothing good for businesses about this decision. If staffing agencies and franchisors are now equal under the National Labor Relations Act with their customers and franchisees, then we will see the end of staffing agencies and franchises as viable business models. Moreover, do not think for a second that this expansion of joint-employer liability will stop at the NLRB. The Department of Labor recently announced that it is exploring a similar expansion of liability for OSHA violations. And the EEOC is similarly exploring the issue for discrimination liability. I think that Browning-Ferris is a jumping-off point, not an end-point, on this key issue. Stay tuned.

 


SERVICE ADVISORS REMAIN EXEMPT

June 23, 2016

Car dealers won a major victory on June 20, 2016 as the U.S. Supreme Court tossed out a decision of the federal Ninth Circuit Court of Appeals, leaving the exempt status of service advisors in place.

Five employees of a dealer in California’s San Fernando Valley had sued Encino Motorcars LLC, claiming they were misclassified as exempt, and seeking back pay for working overtime.  The case was dismissed by the district court, but the Ninth Circuit reversed, relying on a 2011 Department of Labor (DOL) regulation which stated that service advisors were not exempt.  The dealer, with support from NADA and other business associations, appealed to the U.S. Supreme Court.

Noting that dealers had relied for decades on pre-2011 DOL regulations treating services advisors as exempt, the Supreme Court looked closely at the Fair Labor Standards Act, which provides, in part, that the overtime provisions do not apply to “any salesman. . .primarily engaged in. . .servicing automobiles. . .if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles. . .to ultimate purchasers.”    Examining the basis for the DOL’s 2011 about-face regulation, the Court held that “The Department gave little explanation for its decision to abandon its decades-old practice of treating service advisors as exempt. . .” under this statutory language.  The Court concluded that the DOL’s action was arbitrary and capricious and cannot carry the force of law.

The Supreme Court did not, however, reverse the Court of Appeals decision supporting the 2011 regulation.  Rather, it sent the case back to the Ninth Circuit for further proceedings consistent with the Supreme Court’s opinion.  In the meantime, however, the exempt status of service advisors remains intact.

A reminder: Under California’s IWC Order 7-2002, a service advisor must spend more than 50% of his or her time performing exempt work in order to remain exempt from overtime provisions of the law.

Arthur F. Silbergeld, Esq.

Thompson Coburn LLP

(310) 282-9412

asilbergeld@thompsoncoburn.com

 

 


Document, Discipline or Die!

June 20, 2016

The article written below was done at my request! I have known Art Silbergeld for the full 36 years that I have been fighting on behalf of employers. Managers and supervisors are still not doing what needs to be done in terms of documentation! Let’s see what Art has to say.

Document, Discipline or Die

Having defended employers of all sizes across numerous industries in upwards of 400 litigations, I can say unequivocally: an employer’s greatest risk when facing a Superior Court, federal court or administrative complaint is having shoddy documentation – or none at all.

From the get-go, documentation is required.  In addition to a job application, California requires that each new employee receive a form under Labor Code 2810.5 detailing wages, payday, workers’ comp, sick pay, and other information, and that the employer update it when any of the information changes.  Don’t do it?  Wait til a lawyer representing a former employee who is suing finds out.

Have you given an employee a verbal warning lately and forgotten to document it?  Yes, every verbal warning should be documented – if it isn’t, you may later hear that it never happened.  So what?  When a former employee sues, s/he will point to your progressive discipline policy, claim that you jumped directly to termination without any warning.  Then you’re into a he-said/she/said dispute which you could easily have avoided, wriggling in your seat while the jury listens.

Have an employee whose performance doesn’t meet your standards, and now the owner or a supervisor wants the employee gone –fired yesterday?  Where’s the last performance review?  Where is the document the employee got that says shape up, or points out a specific performance and details on how to correct it? Eight months later you’re being deposed and the employee’s lawyer is asking you, “How was he supposed to know the company found his work wasn’t up to snuff?”  And you’re squirming in the chair, looking helplessly at me because you can’t answer and because the employee has demanded 3 years’ back pay!

Find yourself before a hearing officer of the EDD defending a bogus claim for unemployment benefits, and you don’t have any document showing that the employee stole several wrenches, or deliberately broke a laptop, or was under the influence at work, or brought a weapon to work on the day he was fired?

In each one of the cases, you never know where some employee issue that happened just yesterday will end up – in court, facing a complaint or a claim for benefits.  Don’t have the documents to back up your side of the story?  Yes, Jim Potts or your lawyer will do whatever can be done to make the best of it, but it’s your job to help.  Picture a gauge where the needle goes from LOSE to WIN.

Every document you create moves the needle to your side, to WIN.  Document, document, document, or you’re setting yourself up for failure!

 
Arthur F. Silbergeld, Partner

Thompson Coburn LLP

(310) 282-9412

asilbergeld@thompsoncoburn.com

Well, does any of the above sound familiar? Come on managers and supervisors get your act together in this area and remember, personal liability is just a heartbeat away.

 

 


Update! Pending Laws that “Passed” and Failed.

June 13, 2016

Well, way back in March, 2016, I wrote about employment-related bills that had been introduced.  Here is an update on the California bills that failed passage in their house of origination, and an update on the bills passed their house of origination and have moved forward to the other house for consideration. I will have another Blog posting this week for my National readers.

Bills That Failed Passage and Are Dead

AB 1948 (limiting recovery for meal and rest break claims):  This bill would have helped California employers but died in committee in the Assembly.

AB 2461-2465 (PAGA reforms):  These bills would have provided limited but much needed PAGA reform and would have helped California employers.  However, all of these bills died in committee in the Assembly.

AB 2405 (pay for school activities leave):  This bill would have hurt California employers by requiring school activities leave to be paid.  This bill failed passage in the Assembly.

AB 2757 (agricultural workers): This bill would have eliminated certain overtime and related exemptions for agricultural workers, but it failed passage in the Assembly.

SB 878 (Fair Scheduling Act):  This bill would have required retail, restaurant, and grocery employers to provide 7-day advance notice of work schedules and to provide modification pay to employees in the event of cancelled or changed shifts.  This bill failed passage in the Senate.

AB 2879 (arbitration agreements/service members):  This bill would have prohibited requiring service members to agree to arbitrate certain claims as a condition of employment. This anti-arbitration bill failed passage in the Assembly.

Bills That Passed Their House of Origin and Are Still Alive

AB 67 (double time on Thanksgiving):  This bill would require specified retail and grocery establishment employers to pay double time to employees who work on Thanksgiving.  This would not apply to exempt employees or to employees covered by collective bargaining agreements meeting specified conditions. It also not apply to restaurants except those located in retail or grocery establishments.

AB 1676 (inquiries regarding salary history):  This bill would prohibit employers from making oral or written inquiries about an applicant’s salary history.  It would also require private employers to provide an applicant with the pay scale for a position upon request.  If you’re experiencing déjà vu, that’s because Governor Brown vetoed a similar bill last year.

AB 2337 (notice of Labor Code 230.1 rights):  Currently, California law prohibits employers with 25 or more employees from discriminating or retaliating against employees who take time off work for specified purposes related to being the victim of domestic violence, sexual assault, or stalking.  This bill would amend Labor Code section 230.1 to require that employers provide written notice of these rights to all new hires and, upon request, to current employees.

AB 2261 (Expanded Labor Commissioner Power):  This bill would add section 98.74 to the Labor Code to allow the Labor Commissioner to conduct an investigation, issue citations, or bring a civil action against an employer for Labor Code violations, even if no employee has filed a complaint with the Labor Commissioner against the employer.

SB 1001 (Expanding FEHA to Cover Employment Eligibility Verification Practices):  This bill would amend FEHA to add a new category of unlawful employment practices based on an employer requesting more or different documents than required under federal law for verification purposes, refusing to honor documents that appear reasonably genuine, discriminating against an immigrant with authorization to work based on having the status of immigrant, or attempting to reinvestigate or re-verify an incumbent employee’s authorization to work where not legally required to do so.

SB 1063 (Expanding Equal Pay Act to Preclude Race/Ethnicity Based Disparities):  This bill picks up where last year’s Equal Pay Act (strengthening prohibitions on gender-based pay differentials) left off by adding a new Labor Code provision precluding wage differentials based on race or ethnicity.  Although good in principal, the creation of a new statutory prohibition under the Labor Code provides more avenues for lawsuits when discriminatory employment practices are already covered by FEHA and its remedial provisions.

SB 1166 (Parental Leave):  This bill would require all California employers with 10 or more employees to provide up to 12 weeks of unpaid leave to an employee (with at least 12 months of service and who has worked at least 1250 hours in the 12 months preceding the request for leave) for purposes of bonding with a new child within the first year of the child’s birth, adoption, or foster care placement.  The employer would also be required to maintain the employee’s health benefits (on the same terms as if the employee was actively reporting to work) for up to 12 weeks.  California employers with 50 or more employees are already required to provide this leave under FMLA/CFRA to employees meeting minimum length and hours of service requirements.  This bill would expand that leave mandate to employers with 10 or more employees.

SB 1167 (Heat Illness Regs for Indoor Employees):  California presently has regulations requiring employers with employees working outdoors to have heat illness prevention procedures in place (e.g. providing shade, water, and cool-down recovery periods to employees).  This bill would require California’s Division of Occupational Safety and Health to craft similar standards for indoor workers.

Each house has until August 31, 2016 to pass bills.  Thereafter, the Governor has until September 30, 2016 to sign or veto bills that were passed by both houses.  I will keep you posted!


Are Migraine Headaches A Disability?

June 6, 2016

A recent set of circumstances by a client raised the issue as to whether or not migraine headaches are a disability under the Americans with Disabilities Act (ADA). To my surprise, and their credit, there is some credence that it might be. Let’s take a closer look.

The ADA prohibits covered employers from discriminating against job applicants and employees on the basis of a disability. A disability is “a physical or mental impairment that substantially limits one or more major life activities.”

Now, if an employee suffers from severe migraines that prohibit the employee from working, does the employee have a disability? Good question. It just depends on what “working” means. I have a good answer from a previous federal court decision…

When is working considered a “major life activity”?

In Allen v. SouthCrest Hospital, a former medical assistant claimed to suffer from migraines when she worked for SouthCrest Hospital. Those migraines were strong enough to keep her out of work from time-to-time. However, she further testified that she had only previously suffered one previous migraine in her lifetime and the migraines subsided altogether after she resigned from SouthCrest.

So, it begs the question “was she disabled?” That is to say, did Ms. Allen’s migraines — a physical impairment — substantially limit her ability to work. The court didn’t think so:

“To be disabled in the major life activity of working, an employee must be significantly restricted in the ability to perform either a class of jobs or a broad range of jobs in various classes as compared to the average person having comparable training, skills and abilities. Work for a single physician hardly qualifies as a class or broad range of jobs.”

The court then emphasized that the foregoing holds true under the ADA Amendments Act, which took effect on January 1, 2009. The ADAAA broadens the scope of protection available under the ADAAA. Specifically, it enlarges the definition of “disability.” However, the ADAAA does not explicitly discuss or modify the definition of the major life activity of working. In fact, ADAAA Interpretive Guidance explains that the “broad class of job” restriction remains in place:

“Demonstrating a substantial limitation in performing the unique aspects of a single specific job is not sufficient to establish that a person is substantially limited in the major life activity of working.

Therefore, to show that a migraine interferes with the major life activity of “working”, an employee must demonstrate that she was substantially limited in performing a class of jobs or a broad range of jobs in various classes as compared to most people with comparable training, skills, and abilities.”

What happens when an employee complains about migraines?

Do you tell them that they are not disabled? Heck no. Remember, it is very possible that an employee with migraines may not be able to perform a broad range of jobs. It is also possible that an employee’s migraines, depending on their severity, may substantially impact other major life activities.

Instead, play it smart. Engage in an interactive discussion with the employee. That is, work with the employee to attempt to arrive at a reasonable accommodation that will allow the employee to perform the essential functions of the job.

Also, recognize that a migraine, if severe enough, could be a “serious health condition” and trigger the employer’s obligations under the Family and Medical Leave Act. Just be sure to request FMLA certification, because employees who claim to have “migraines,” may not necessarily have them.

For California employers (as usual), there is another consideration. Under the Fair Employment & Housing Act the guidelines are stricter than those under the ADA. Do not take a chance with any medically related issue. Engage in the interactive process and see how you, as the employer, can work with an employee that suffers from migraines.

In the situation that promoted a call from one of my clients their employee always seems to call in on a Friday or a Monday with a “migraine.” One does have to wonder if the employee is being truthful or just using her migraines as an excuse! Any comments on this? You know how to reach me!